That was the optimistic note from Overseas Shipholding Group chief executive Sam Norton this morning as he addressed investors at Noble Capital’s 14th annual institutional investor conference.

Improved rates have been noticeable over the course of the past four or five months, he said.

“We’ve seen spot rates increase from maybe $38,000-$40,000 per day to the mid-$50,000s in the January period,” Norton said.

“So far those rates are holding — we see it as an optimistic sign,” he added. Norton is among a group of shipping chief executives and chief financial officers speaking over the next two days as Florida-based investment bank Noble continues to ramp up its shipping efforts.

As TradeWinds reported last year, Noble hired investment banker Mark Suarez and equity analyst Poe Fratt in a campaign to push into shipping.

Although its efforts focus largely on owners with small market capitalisations, its first conference to include shipping presenters also has drawn bigger fish like Scorpio Tankers, Scorpio Bulkers, Genco Shipping & Trading and International Seaways. OSG’s Norton updated investors on the company’s progress since its December 2016 split, which saw International Seaways spun off as a separate public company with internationally trading tankers.

OSG retained the company’s previous US-flag fleet, which operates almost exclusively in the protected Jones Act.

The market has been struggling with oversupply since legislation allowed US crude to be exported rather than restricted to the domestic trade.

About 100 tankers and articulated tug barges are still plying the US coastwise trade where perhaps 80 would be a figure more in balance with demand, he said.

“The oversupply is gradually working its way through the system,” he said. “The market needs to work through a reduction in supply.”

Also encouraging is some increase in demand, he said. It stems from increased US shale oil production, but “more importantly” an increasing spread between the price of West Texas Intermediate (WTI) and Brent crude oil.

Cheaper WTI levels make it more attractive for US refineries to source crude domestically rather than abroad, building business for Jones Act tankers, he noted.

A swing of just 15% of business from Philadelphia-area refineries to domestic crude from West Africa would fill the equivalent of eight tankers out of just 47 available in that trade, he said.

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